Kenneth Clarke yesterday promised to give his party economic competence, a return to honest government, and his own huge experience - if they decide to risk picking a 65-year-old as the leader they hope will take them back into power in 2009-10, writes Michael White.

Making his "beauty contest" speech to the Conservative conference, Mr Clarke sidestepped both Europe and Iraq (on which he has major differences with many Tory MPs and activists), and instead concentrated on the principles that had made him a successful chancellor, whose legacy "Gordon Brown has blown", he said.

The speech won him many bursts of applause and a two-minute standing ovation - one fewer than David Cameron, his rival for the centre-left vote, had earned at the podium before lunch. But critics complained that Mr Clarke's speech was "too focused on the past when the party needs to look to the future".

Though Tony Blair's political style and his third victory haunt this conference, Mr Clarke and other candidates for the Tory crown concentrate much of their fire on "Brown's Britain" and the new PM they expect to face at the next election.

Labour raised taxes, hobbled enterprise, and borrowed too much - "salami-slicing, Labour slice by slice" the Thatcher inheritance - since it did not understand a market economy, Mr Clarke claimed.

He combined a warning that economic competence would be the key to success in 2009-10 (without it, "you are left with a political doughnut with an enormous hole in the middle") with a reminder he had achieved a low-tax economy before and could do so again.

In a crucial passage on the need to combine an enterprise economy with modernised public services, he said that it would be "better to under-promise and over-perform" on tax cuts.

"We have to fight and win a new battle of ideas in favour of better but smaller government in the 21st century. That is the best way of making Britain prosperous and free," Mr Clarke told representatives - having begun by saying "I am fed up with our party losing elections, we used to be members of a party that won elections."

David Cameron

· Stress on appeal to public as party's fresh face · Tories must 'inspire new generation' of supporters

David Cameron yesterday urged fellow Tories to create "a new generation of Conservatives" in a speech underlining his appeal to the public as the fresh face of the party, writes Tania Branigan.

The shadow education secretary is staking his leadership campaign on his ability to win over young voters and young colleagues. He will spend the next two weeks wooing the newest parliamentary recruits, hoping to poach David Davis supporters with one-to-one meetings.

Speaking without notes, Mr Cameron laid out an unashamedly modernising message, warning that the party would be "pathetic" to hope that carrying on as it had so far would lead to victory.

"There is a new generation of social entrepreneurs. There is a new generation of businessmen and women," he said. "We can lead that new generation. We can be that new generation."

He took care to hit traditional Tory buttons by praising aspiration, calling for lower and simpler taxes and promising to support marriage through the tax system. Like every other leadership contender, he also attacked the chancellor to show he could take on a government led by Gordon Brown. But he focused on the themes of renewal and change, telling the party that only fundamental reform would allow the party to defeat Labour.

"They have failed. But we have failed too," he said. "We have to change and modernise our culture and attitudes and identity. I'm not talking about some slick re-branding exercise. When we fight the next election [we need] to have a message that is relevant to people's lives today, that shows we're comfortable with modern Britain and that we believe our best days lie ahead. I want us to turn on a whole new generation in to Conservative policies and ideas. I want to inspire a new generation with Conservative dreams."

Yesterday a member of the Cameron team said he would concentrate on wooing the new intake of Tory MPs. Mr Cameron must beat Kenneth Clarke to win a place in the ballot of members. If he can do so, his supporters argue, the former chancellor's backers are bound to rally to the younger man as the centre-left candidate. The first ballot of MPs takes place on October 18.

The speeches: Rivals reveal a big divide

One has made countless speeches to Conservative conferences. The other was making his first. One is familiar to every Tory. The other needs to make himself known. But both David Cameron and Kenneth Clarke began their speeches to the party yesterday with the same promise: they could put the Tories back in power.

Cameron emphasised change and modernity, walking about the stage, speaking from memory and emphasising his words with a measured delivery. Clarke stood behind a podium, and bellowed- unusually for him - from a written text. Both made self-deprecating jokes but Clarke was more successful than Cameron at getting the hall to respond when he asked them to shout back answers to a question.

The differences between them were striking. Clarke made a perfunctory reference to Iraq, attacking the government over its handling of intelligence. Cameron, a supporter of the war, made no mention at all. Clarke dismissed the prime minister as a man trying to "steal some of our principles". Cameron made only one mention of Tony Blair, and that was positive.

Neither said much in the way of policy specifics, but Clarke's was the more empty speech. He said policy without economics was "a political doughnut with an enormous hole in the middle".

He said almost nothing about health or education while Cameron, who has the benefit of holding the shadow education brief, made a play of his commitment to special needs schools, reform and choice in public services.

But where Clarke's speech was rich on economics - "I do not have to prove my economic competence to the British public" he said - Cameron's made little mention of the subject.

That points to Clarke's biggest strength: only he starts with the undisputed right to treat Gordon Brown as an equal."I want Conservative values to win again," Clarke concluded.

But it was Cameron who struck the more optimistic tone. He needed to offer hope. Clarke knew he could offer experience. Both think they can win.Julian Glover